What options does Itan have if it receives rebates or other consideration from suppliers based on franchisee purchases?

According to Itan's 2025 Franchise Disclosure Document, if Itan receives rebates or other consideration from suppliers based on a franchisee's purchases, Itan has two options. First, Itan may pass those amounts through to the franchisee, effectively reducing the cost of goods for the franchisee. Second, Itan may deposit such amounts into the brand and system development fund, which is used for the benefit of the entire Itan franchise system.

This clause gives Itan discretion in how it handles rebates, which could impact a franchisee's profitability. If rebates are passed directly to the franchisee, it would lower their cost of goods and increase their profit margin. However, if the rebates are put into the brand and system development fund, the franchisee may benefit indirectly through enhanced marketing efforts or system improvements.

It is important for a prospective Itan franchisee to understand how Itan typically handles these rebates. While the FDD outlines the options Itan has, it does not specify which option Itan is more likely to choose. A potential franchisee should inquire about Itan's historical practices regarding supplier rebates and how the brand and system development fund is managed and utilized. This information can help the franchisee better assess the potential financial benefits and costs associated with the franchise.